The Goal: A Process of Ongoing Improvement

I set the bowls in a line along the length of the table and put the matches at one end. And this gives me a model of a perfectly balanced system.

"No, it won’t be three,’’ I tell them. "The mid-point between one and six isn’t three.’’

It’s starting to make sense. Our hike is a set of dependent events...in combination with statistical fluctuations.

And mostly it’s an accumulation of slowness—because dependency limits the opportunities for higher fluctuations

And what is operational expense? It’s whatever lets us turn inventory into throughput, which in our case would be the energy the boys need to walk. I can’t really quantify that for the model, except that I know when I’m getting tired.

So as the slower than average fluctuations accumulate, they work their way back to me. Which means I have to slow down. Which means that, relative to the growth of inventory, throughput for the entire system goes down

I’m the last operation. Only after I have walked the trail is the product "sold,’’ so to speak. And that would have to be our throughput—not the rate at which Ron walks the trail, but the rate at which I do.

What’s happening isn’t an averaging out of the fluctuations in our various speeds, but an accumulation of the fluctuations

Most of the factors critical to running your plant successfully cannot be determined precisely ahead of time,’

For one thing, there is a mathematical proof which could clearly show that when capacity is trimmed exactly to marketing demands, no more and no less, throughput goes down, while inventory goes through the roof,’’ he says. "And because inventory goes up, the carrying cost of inventory—which is operational expense—goes up. So it’s questionable whether you can even fulfill the intended reduction in your total operational expense, the one measurement you expected to improve.’’